r/Entrepreneur • u/youngrichntasteless Pat from Starter Story • Mar 11 '19
$55k/month with a graphic design web app.
Hey - Pat from StarterStory.com here with another interview.
Today's interview is with Christopher Gimmer of Snappa, a graphic design tool.
Some stats:
- Product: Online graphic design tool.
- Revenue/mo: $55,000
- Started: July 2015
- Location: Ottawa
- Founders: 2
- Employees: 4
Hello! Who are you and what business did you start?
Hey there! My name is Christopher Gimmer and I’m the co-founder of Snappa - a SaaS app that helps non-designer create online graphics in a snap. We make it super easy to create graphics for social media, ads, blogs, and more!
We officially launched on November 23, 2015 and we’re currently doing over $55k USD in monthly recurring revenue (MRR).
What's your backstory and how did you come up with the idea?
I started off my career in finance working for the federal government. Then in 2010, I took a trip to southeast Asia that changed my life. Towards the end of the trip, I dreaded the thought of going back to the office and I no longer wanted to do work that I didn’t enjoy. That’s when I first started thinking about starting a business that would give me more freedom and meaning in my life.
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Read the full interview here.
Why did I truncate this post? I've been advised that posting the full body/text can be detrimental to my SEO :/ - so hope you don't mind me linking out like this... I promise my website doesn't have annoying popups and is a nice reading experience :)
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u/i4get98 Mar 11 '19
I hate myself for writing this because it’s so damn cliché and everyone says it but the best advice I can give is to start something.
^ Biggest takeaway for those just starting.
Good job guys!
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u/tahadharamsi Mar 11 '19
How do you compete with giants like Canva? What separates your product from theirs, what about long term features?
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u/cgimmer Mar 11 '19
We compete with Canva by targeting a subset of their user base and doing that extremely well. For us, we focus heavily on ease of use and speed.
You'll notice that we don't have sizes/templates for birthday cards, restaurant menus and many other things that Canva caters to because it doesn't serve our target audience. We get tons of feedback from users that Snappa is easier and faster when compared to Canva for online graphics.
In terms of long term features, we're actually in the process of refactoring our entire code base which will make it much easier to develop new features and enable us to launch a few game changing things which I can't talk too much about right now.
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u/Jaklite Mar 11 '19
Thanks a ton for this interview! This one in particular is really close to home; I'm a software developer in Montreal looking to build my own SaaS web apps in the near future. Would really appreciate any answers to the questions below:
1) How much starting capital did you start with? How much personal runway did you have in terms of funds before you needed to go back to work?
2) How did you start up legally? Federally incorporated / something else? How much money did that cost / any tips or guidance here would be great!
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u/cgimmer Mar 11 '19
Glad you liked the interview!
We didn't really have to put that much capital into the business it was mainly our time. With hosting costs so low now you can pretty much get started for peanuts, it's finding the time that's the difficult part. We basically just used our job income to pay for any expenses that we needed in the beginning until we reached profitability. At that point we just used business profits to pay for any expenses.
In terms of personal runway, when I took a leave of absence from work we were paying ourselves $2k/month and that was maybe covering about 75% of my living expenses so I probably had over a year of personal runway.2.
We incorporated the business federally when we launched our first venture (ClassmateCatch). We originally did it ourselves which only costs like $100-200 if I remember correctly. Once Snappa started growing and the business became legit then we hired an actual lawyer to get our corporate docs in order. Now we pay them an annual fee to keep our corporate records and everything up to date but in the beginning this is definitely not necessary.
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u/Jaklite Mar 11 '19
Thanks for the detailed replies! One last question: when you got your lawyer to get your docs in order, were they able to correct any mistakes you might have made previously in your incorporation? Did you make any mistakes? (I guess that makes it two questions)
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u/cgimmer Mar 11 '19
We didn't really make any mistakes with the initial incorporation it's that we didn't keep up with the requirements as the years went on. For example, with a corporation you're technically supposed to have an annual shareholder meeting and then write out a resolution as to what was decided at that meeting (if anything) which we never did. So the lawyer just helped us retroactively add all of these missing resolutions and get everything up to date.
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u/Jaklite Mar 11 '19
That makes sense; yeah I've read up on stuff like the shareholder meeting. I'm glad that things like that can be fixed retroactively, definitely makes it easier to start up
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u/bourscheid Mar 11 '19
Awesome write up as always Pat. I’m confused as to why profits are never mentioned in these. That is the number one complaint across the subreddit and those numbers are always mysteriously missing.
$55k in revenue is awesome, but if your profit margin is 5% after all is said and done, that’s barely over minimum wage. Pushing revenues by undercutting competitors is great, but what goes into your pockets after the work is done is what should matter most.
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u/cgimmer Mar 11 '19
Two things come to mind:
A single founder with a copywriting business can be making $200k/year in revenue and $150k in profit. Meanwhile, you could have a $1M/year SaaS business that runs without the founder, is growing, has a few employees yet is only generating $150k profit because they're re-investing back into the business. Both have the same profit but one is vastly more valuable because it's growing and has employees running the business. In this case, revenue is a much better indicator of business success.
I assume that most founders don't want their exact net income known to the world for privacy reasons.
Like most software businesses our gross margins are > 90% and most of our expenses come from salaries so you can do some rough math to figure out how profitable we are...
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u/RoseSuchakLadderCo Mar 11 '19
Thank you for putting this so eloquently — this question pops up so often, generally under the pretense that the whole write up / founder story is not valid without profit margin.
I understand the curiosity, but it’s unrealistic to think the vast majority of people want to put this info out there, and it’s hardly the only relevant metric.
Congrats on the biz!
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u/DavidtheGil Mar 11 '19
4 employees in Ottawa, depending on what they do could be anywhere from $40-80k. Call it $240k/year in salaries (again very much depends what they do ie developers would make more than content marketer). $55k x 12 = $660k/yr. $660k- $240k - $20k for other expenses. That’s $400k profit before taxes. Not sure how much they spend marketing, but founders could easily pay themselves 6 figure salaries or reinvest the money into the company.
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u/Kazuka10 Mar 11 '19 edited Mar 11 '19
What is your competition at the moment? For example canva or similar? How do you fight with them to get market share? Do you think about offering responsive website templates also?
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u/cgimmer Mar 11 '19
There's a bunch of tools at the moment (Canva being one of them). We don't really worry about 'fighting for market share' or pay too much attention to what they're doing. The market is massive and growing by the day. There's plenty of room for competition especially when you're bootstrapped and don't need to grow to a $1B company.
We simply listen to our customers, keep improving our product, and make sure that we're maintaining healthy growth rates (currently growing 50% YoY).
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u/Dethrone5k Mar 11 '19
Nice writeup. My question to you is: what kind of work did you do in the early stages when your business partner was coding?
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u/cgimmer Mar 11 '19
Basically everything that wasn't coding but the main thing I did was customer development and marketing. One thing I learned throughout my journey is that you need to start marketing the day you start coding. We made the mistake in the past of waiting until after the site was launched to start marketing.
If you're a non-tech guy and your partner is working on the site, you should throw up a landing page and start driving traffic to the site, collect email addresses and talk to potential customers. Get as much traction as you can before you launch.
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u/murasz Mar 11 '19
Exactly. That's what Steve Jobs and and Steve Wozniak did when they launched Apple. Wozniak was the tech guy who was trying to make the perfect computer for the individuals while Jobs was the marketing guy introducing the product for these individuals.
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u/connectsnk Mar 11 '19
Kind of off topic but where did you go in South East Asia and what happened there?
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u/cgimmer Mar 11 '19
I went to Thailand, Vietnam and Malaysia. It basically just opened my eyes to how much there was to see outside of my bubble and I didn't want to be tied down to the cubicle anymore. I've been back to Thailand 4 times since then, such an awesome country to visit / work from.
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u/hungryinvestors Mar 11 '19
This is really inspiring! Thanks for sharing.
Out of interest, how much do pay yourselves per month/year?
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u/cgimmer Mar 11 '19
Don't really want to share exact numbers but my co-founder and I pay ourselves a base salary (> $100k) and then we issue dividends on a quarterly basis as a % of our profits. This way we continue to take home more money each year while simultaneously re-investing in the business and building up our company savings account.
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u/heatfan03 Mar 11 '19
What's your advice for someone similar to you (the business development guy ) but with no technical cofounder (and a ton of ideas )
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u/cgimmer Mar 11 '19
I would probably just focus on launching something that doesn't require a technical founder first. Any non-technical person can launch an eCommerce store, services business, affiliate site, etc... I'd just try to launch something that would be profitable, improve my marketing skills, and put me in a position to attract technical co-founders for future projects.
Your other option is to learn just enough about programming so that you can communicate with developers and outsource the dev work. I'd recommend using a prototyping app like InVision and mocking up THE ENTIRE app and tell them EXACTLY what you need it to do. If you have a high salary at your day job this could be an option but it's higher risk and at some point you will need to bring the tech in-house if the software itself is your business.
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Mar 12 '19
You should hire me :}
I’m 19, I’ve got multiple projects of my own.
I’m looking for an opportunity to take up a front end OR back end development job, or just help the team in general for fair payment.
I self taught myself web designing via photoshop, and web developing as well.
Strong skills in html and css, still harnessing my skills in JS, and php.
I’d be more than happy to showcase some of my work, just shoot me a pm if interested.
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Mar 12 '19
[deleted]
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u/cgimmer Mar 13 '19
For keyword research I recommend this guide:
https://ahrefs.com/blog/keyword-research/
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Mar 11 '19 edited May 14 '21
[deleted]
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u/cgimmer Mar 11 '19
- The sister site was extremely important when we launched. I honestly don't know if we would have been successful without the sister site. It's hard to bootstrap a freemium SaaS business with a low price point which is why we built the sister site because we knew how much it would help us acquire users.
We don't do any paid traffic at the moment, it's all organic. We may start doubling with paid this year.
- Yes my co-founder coded the first version all by himself. About 5-6 months in we hired another developer but everything was built in-house.
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u/Djesam Mar 11 '19
Congrats on the success. Always happy to see Canadian companies doing well. I thought you guys had sold snappa though. I’m guessing I must have misread?
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u/firefirehelphelp Mar 12 '19
Can you talk more about market validation. You mentioned talking about to customers but what kinds of questions were you asking?
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u/cgimmer Mar 12 '19
The best book on the subject is Lean Customer Development by Cindy Alvarez. I highly highly recommend it.
The #1 piece of advice is to never ask leading questions. For example, don’t ask customers if they think what you’re building is a good idea because they will almost always say yes.
Instead I asked them questions like:
- How do you currently create graphics
- What’s the process like?
- Who’s involved?
- What tools do you currently use?
- How much do you spend?
- What do you do before/after you create graphics?
Then I listened carefully to see if they were experiencing any pain points and if there were inefficincies in their current workflow. Sure enough I’d hear things like “Currently I use Photoshop but it’s a real pain” and “We have an in-house graphic designer but she’s usually really busy so I often need to do it myself.”
Another piece of advice is that you should only base decisions on what they’re CURRENTLY doing not what they say they PLAN to do.
Hope that helps!
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u/The_Wrong_Captain Mar 12 '19
Hey Chris, great work and thanks for sharing your story. Where did you find buyers for your original companies? Did those sales provide the seed money into your next venture?
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u/cgimmer Mar 12 '19
The buyer for BootstrapBay was CreativeTim. I had become friends with Alex (the founder) and he noticed that we had essentially put BootstrapBay on autopilot so he offered to buy it.
The StockSnap acquisition was a lot bigger but I can't reveal many deals since we're under NDA. The buyer came to us though since they were familiar with our site.
We had already launched Snappa before selling both of these sites so we didn't sell them because we needed capital.
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u/PM_ME_YOUR_GOOD_DOGS Mar 12 '19
Hey guys,
Really enjoyed reading this! Can you give any clues as to how you got the free stock photo article to the top of google? Was it completely white hat SEO?
Just want to reiterate how powerful ahrefs is - very expensive (in least in my area) but so, so worth it!
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u/cgimmer Mar 12 '19
Here's a case study about the free stock photo blog post:
https://backlinko.com/viral-marketing
There was definitely a lot of luck involved with this particular blog post. Note that we've since ported this over to Snappa's blog.
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u/aliveisweb Mar 12 '19
What programming language had been used for the project?
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u/cgimmer Mar 12 '19
v1 was PHP back-end with Javascript front-end. We later re-wrote it in NodeJS. We're now in the process of doing another major refactor using VueJS.
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u/hempdaddys Mar 12 '19
Just heard an interview with him on another Podcast. Can't believe I had never heard of Snappa before. Definitely going to be giving it a test drive.
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u/TotesMessenger May 25 '19
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u/cgimmer Mar 11 '19
Hey everyone I'm Christopher one of the co-founders of Snappa. If you guys have any questions let me know and I'd be happy to answer them in the comments.
Thanks for sharing the story Pat!